|
June 18, 2008
Sandvika,
Norway: REC Commits to Phase 1 of Singapore Manufacturing Investment
Renewable
Energy Corporation ASA (REC) has decided to invest close to NOK
13 billion in the first phase of an integrated manufacturing complex
for production of wafers, cells and modules in Singapore. The
investment is funded through debt financing and own cash flow.
Production is expected to commence in the first quarter 2010,
and reach full capacity of 740 MW of wafers, 550 MW of cells and
590 MW of modules before 2012. The annual consolidated revenues
from these volumes are expected to be NOK 10-11 billion in 2012.
The
investment decision covers the first (Phase I) of several planned
development phases.
"This
investment supports REC's position as a leading provider of highly
competitive solar energy solutions, and in achieving our main
corporate goals of reducing costs and securing profitable growth.
The project cost levels should enable us to compete profitably
at grid-parity prices in several markets, which is essential in
building a robust business case", says Erik Thorsen, President
& CEO of REC ASA
The
company has carried out extensive value engineering over the past
nine months, which has significantly reduced the capital expenditure
for Phase I as well as secured the interdependency towards subsequent
development. The investment decision for the next phase is expected
in 2009.
"Our
entry into Singapore ensures continued revenue growth beyond the
significant growth to come from all the ongoing capacity expansions
across all REC's business activities. Based on this expansion,
REC should be producing ~2,400 MW of wafers, ~780 MW of cells
and ~740 MW of modules in 2012, and this will secure a significant
presence for REC in key solar markets," says Thorsen.
The
solar plant will be based on multicrystalline technology, and
the integrated business model secures volume off-take and margins
as well as an in-house base for product development across the
value chain. REC has already secured supply of polysilicon through
its ongoing expansion in Moses Lake and Butte, and other necessary
raw materials to facilitate the expected production levels.
The
estimated capital expenditure of close to NOK 13 billion allows
for contingencies and cost escalation due to inflation, and also
includes a yet unallocated project reserve.
The
investment will be funded through operating cash flow and existing
and new credit facilities. REC has signed a mandate for a fully
underwritten facility from ABN AMRO, BNP Paribas, DnBNOR, Nordea
and SEB covering new loans and guarantees of NOK 10 billion at
market terms.
Over
the past year, REC has allocated 75 man-years to pre-engineering
activities, which has resulted in significant improvements both
in terms of flexibility and costs. A more compressed site optimizes
land utilization and reduces pipe racks and distances between
the factories, and this has in turn reduced the capital expenditure
and the interdependency of the development phases. Agreements
have already been reached for all construction permits.
REC
has now assigned approximately 40 employees to work with the Singapore-project
in Norway and on-site in Singapore, and expects that this number
will increase significantly during the next few months. An on-site
office was established in April.
REC
has also signed Letters of Intent with all EPCM-partners, including
costs and schedules as well as incentive structures. The investment
decision today also triggers agreements securing procurement for
the bulk of (90 percent) equipment supplies where cost and delivery
schedules are determined. REC will immediately commence detailed
engineering and early construction and piling, with the target
of commencing ramp-up of production early 2010.
Further details about: REC Group
|
